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S&P Global (SPGI) Q4 Earnings & Revenues Beat, Offers View
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S&P Global, Inc. (SPGI - Free Report) reported fourth-quarter 2016 adjusted income of $334 million or $1.28 per share compared with $304 million or $1.12 per share in the year-earlier quarter. The adjusted earnings for the reported quarter comfortably beat the Zacks Consensus Estimate of $1.20.
Revenues for the quarter were $1,399 million compared with $1,374 million in the year-ago quarter. Quarterly revenues beat the Zacks Consensus Estimate of $1,326 million. Top-line growth was primarily supported by successful productivity efforts, partially offset by higher taxes.
GAAP income for the quarter was $537 million or $2.05 per share compared with $248 million or 91 cents in the year-ago quarter.
For full-year 2016, the company’s GAAP income was $2,106 million or $7.94 per share. Revenues increased 7% year over year in 2016 to $5,661 million.
Segmental Details
S&P Global Ratings segment’s revenues increased 14% year over year to $658 million, chiefly driven by increase in transaction revenues. Operating profit jumped 11% to $258 million from the prior-year quarter. Operating profit margin decreased 100 basis points to 39% in the quarter.
S&P Global Market and Commodities Intelligence revenues declined 11% year over year to $595 million, due to the sale of J.D. Power, the SPSE/CMA pricing businesses, and Equity and Fund Research. The segment’s operating profit was up significantly to $530 million, while operating margin improved 6,790 basis points to 89%, primarily driven by gains from divestitures.
S&P Dow Jones Indices revenues rose 13% to $171 million in the reported quarter. The segment’s operating profit increased 10% to $104 million.
Financial Aspects
S&P Global ended the year with cash and equivalents of $2,392 million compared with $1,481 million in 2015. Long-term debt was $3,564 million at 2016 end compared with $3,468 million in the year-ago period. The company generated free cash flow from continuing operations of $1,482 million during the year compared with $1,225 million a year ago.
For the full year, the company returned $1.5 billion to shareholders with $1.1 billion in share repurchases and $380 million in dividends. The company has approximately 25.8 million shares remaining under the existing share repurchase program. The company expects to continue its share repurchase program in 2017 as well.
The company provided its initial guidance for 2017. It currently expects adjusted EPS (earnings per share) to be $5.90 to $6.15, while GAAP EPS is expected to be in the range of $5.65−$5.90.
TransUnion has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters, with an average earnings beat of 9.95%.
Verisk Analytics has an impressive long-term earnings growth rate of 11.6%.
IHS Markit has surpassed the Zacks Consensus Estimate twice in the trailing four quarters, with an average earnings beat of 3.03%.
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S&P Global (SPGI) Q4 Earnings & Revenues Beat, Offers View
S&P Global, Inc. (SPGI - Free Report) reported fourth-quarter 2016 adjusted income of $334 million or $1.28 per share compared with $304 million or $1.12 per share in the year-earlier quarter. The adjusted earnings for the reported quarter comfortably beat the Zacks Consensus Estimate of $1.20.
Revenues for the quarter were $1,399 million compared with $1,374 million in the year-ago quarter. Quarterly revenues beat the Zacks Consensus Estimate of $1,326 million. Top-line growth was primarily supported by successful productivity efforts, partially offset by higher taxes.
GAAP income for the quarter was $537 million or $2.05 per share compared with $248 million or 91 cents in the year-ago quarter.
For full-year 2016, the company’s GAAP income was $2,106 million or $7.94 per share. Revenues increased 7% year over year in 2016 to $5,661 million.
Segmental Details
S&P Global Ratings segment’s revenues increased 14% year over year to $658 million, chiefly driven by increase in transaction revenues. Operating profit jumped 11% to $258 million from the prior-year quarter. Operating profit margin decreased 100 basis points to 39% in the quarter.
S&P Global Market and Commodities Intelligence revenues declined 11% year over year to $595 million, due to the sale of J.D. Power, the SPSE/CMA pricing businesses, and Equity and Fund Research. The segment’s operating profit was up significantly to $530 million, while operating margin improved 6,790 basis points to 89%, primarily driven by gains from divestitures.
S&P Dow Jones Indices revenues rose 13% to $171 million in the reported quarter. The segment’s operating profit increased 10% to $104 million.
Financial Aspects
S&P Global ended the year with cash and equivalents of $2,392 million compared with $1,481 million in 2015. Long-term debt was $3,564 million at 2016 end compared with $3,468 million in the year-ago period. The company generated free cash flow from continuing operations of $1,482 million during the year compared with $1,225 million a year ago.
For the full year, the company returned $1.5 billion to shareholders with $1.1 billion in share repurchases and $380 million in dividends. The company has approximately 25.8 million shares remaining under the existing share repurchase program. The company expects to continue its share repurchase program in 2017 as well.
S&P Global Inc. Price, Consensus and EPS Surprise
S&P Global Inc. Price, Consensus and EPS Surprise | S&P Global Inc. Quote
Outlook
The company provided its initial guidance for 2017. It currently expects adjusted EPS (earnings per share) to be $5.90 to $6.15, while GAAP EPS is expected to be in the range of $5.65−$5.90.
Zacks Rank
S&P Global currently carries a Zacks Rank #2 (Buy). Some other stocks which warrant a look in the sector include TransUnion (TRU - Free Report) , Verisk Analytics, Inc. (VRSK - Free Report) and IHS Markit Ltd. . All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
TransUnion has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters, with an average earnings beat of 9.95%.
Verisk Analytics has an impressive long-term earnings growth rate of 11.6%.
IHS Markit has surpassed the Zacks Consensus Estimate twice in the trailing four quarters, with an average earnings beat of 3.03%.
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In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>